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Russian Economy in 2016 Trends and Outlooks (Issue 38) Section 6 Institutional Changes GAIDAR INSTITUTE FOR ECONOMIC POLICY RUSSIAN ECONOMY IN 2016 TRENDS AND OUTLOOKS (ISSUE 38) Gaidar Institute Publishers Moscow / 2017 393 RUSSIAN ECONOMY IN 2016 trends and outlooks UDC 338.1(470+571)"2016" BBC 65.9(2Рос) R95 Russian Economy in 2016. Trends and Outlooks. (Issue 38) / [V. Mau at al; ed. S. Sinelnikov-Murylev (editor-in-chief), А. Radygin]; Мoscow: Gaidar Institute Publishers 2017. – 480 pp. – ISBN 978-5-93255-502-6 The review provides a detailed analysis of main trends in Russian economy in 2016. The paper contains 6 big sections that highlight single aspects of Russia's economic development: the socio-political context; the monetary and budget spheres; financial markets; the real sector; social sphere; institutional challenges. The paper employs a huge mass of statistical data that forms the basis of original computation and numerous charts. UDC 338.1(470+571)"2016" BBC 65.9(2Рос) ISBN 978-5-93255-502-6 © Gaidar Institute, 2017 394 Section 6 Institutional Changes Irina Dezhina 6.5. The situation in the sphere of science and innovation1 Two ongoing parallel processes marked the year 2016. The first one had to do with the continuing implementation of previously planned measures, although it clearly fell behind the earlier established schedule. The scientific research community defined it as progressive stagnation. The second process involved the active elaboration, at the government level, of new strategic documents aimed at a fundamental revision of current policies in the sphere of science and innovation. These were the Strategy for Scientific and Technological Development of the Russian Federation, the National Technology Initiative (NTI) Strategy, and the draft federal law On Scientific, Scientific-technological and Innovation Activity in the Russian Federation, to supersede the Federal Law On Science and State Scientific and Technological Policy enacted in 1996. In August, a new RF Minister of Education and Science was appointed, and so it could be expected that the priorities of the government policy in the field of science and related measures would likewise be adjusted. The focus may well be shifted towards the sphere of education, which is also important from the point of view of science: the creation of high quality human resources in the field of scientific research begins in the secondary school education system. In spite of the introduction of a number of comprehensive measures aimed at support and promotion, some aspects of the issues that have to do with lack of personnel in certain key areas have never been resolved. Among other things, it is necessary to alter the hierarchical and age structure of research personnel, create proper conditions for their career growth, and properly adjust the highest-level qualification training system. At the same time, the progress in the academic and higher education sectors was slower than necessary. The year 2016 saw a sort of anniversary - three years had elapsed since the start of reform in the Russian Academy of Sciences (RAS). The prevailing opinion within the academic community was that no serious organizational improvements had been achieved in the research sector, while productivity growth in the academic sector had been too slow. The response of the scientific researcher community began to resemble that observed in the mid-1990s, when the signs of destruction in the science sphere reached their historic high of the entire post-Soviet period. Most probably, such reactions were caused by the poor understanding of the half-baked reform measures coupled with lack of trust in the authorities, dwindling budget funding, and fears associated with possible personnel cuts in the future. Besides, the sphere of science has recently become 'swamped' in minor issues like calculating bibliometric measures, changing the documentation flow patterns for the Federal Agency for Scientific Organizations (FASO), merging some previously separate research institutes. The pessimism felt by the scientific research community was evidently in contrast with some positive changes that last year had just become manifest. These were the increasing number and improving quality of scientific publications (the growth rate of publications in scientific journals soared in Q1; incidentally, the number of publications written without foreign co- authors was increasing at a higher rate than that written with foreign co-authors). Besides, some positive shifts also occurred in the sphere of commercial use of results of scientific research, including innovation clusters. 1 Author of chapter: I. Dezhina – Gaidar Institute, Skolkovo Institute of Science and Technology. 423 RUSSIAN ECONOMY IN 2016 trends and outlooks 6.5.1. New strateg ic d o c u m e n t s In 2016, the development of two new strategies was underway: the Strategy for Scientific and Technological Development of the Russian Federation (hereinafter – STD Strategy) and the National Technology Initiative Strategy (hereinafter – NTI Strategy); besides, in autumn 2016, work was started on Russia's development strategy for 2018–20241, the sphere of science and technology being one of its principal aspects. In each of these documents the emphasis is placed somewhat differently. The STD Strategy addresses specifically the scientific research field and the commercial use of intellectual products. The NTI Strategy regards the sphere of science and technology as one of the important components of Russia's entry into new hi-tech markets, but assigns a major role in this entry to business activities. The ever-increasing number of new strategic documents (in addition to the already adopted ones, including several sectoral strategies, one of the most recent being, for example, the strategy for developing the field of photonics) is a sign of something like a crisis unfolding in the sphere of science and technology, to which various stakeholders with different views are attempting to provide some sort of a solution. Indeed, the persisting core problems – the interdependence of all the components of the innovation system and the quality of state administration - are still there. Their existence was once again confirmed by the latest Global Innovation Index 2016 Report2. Russia, while having moved up 5 spots to 43rd place, still fell significantly behind most countries in terms of some important parameters like innovation linkages (112th among a total of 128 countries), rule of law (104th), state of cluster development (101st). This country still ranks high by its share of females employed with advanced degree (2nd place), domestic market scale, and patent applications filed with the national patenting agency – but these are by no means the key innovation development parameters. The STD Strategy, approved by the RF President as of 1 December 20163, relies in the main on the concept of Grand Challenges. This term came to this country a few years ago, having been borrowed from the European Union's practices. Grand Challenges are understood as existing major issues that include the situation with food supplies, demography, energy and other major issues, as well as national security threats. The Strategy is designed to link Grand Challenges with the national goals and priorities as set out in strategic planning documents. The importance of the new Strategy was underlined by the RF President in his Annual Presidential Address to the Federal Assembly, where several important provisions were put forth, including the necessity to develop cross-cutting technologies4, promote competition in the sphere of science and technology and to support talented young scientists on a long-term basis.5 1 Dmitry Medvedev and Alexei Kudrin discussed the work on the strategy for Russia's development from 2018 through 2024. Presidential Council for Economic Modernization and Innovative Development. September 22, 2016. See http://i-russia.ru/all/news/31845/ 2 The results of a comparative study of innovation systems in 128 countries. Source: The Global Innovation Index 2016. Winning with global innovation. JOHNSON Cornell University, INSEAD, WIPO, 2016. https://www.globalinnovationindex.org/gii-2016-report 3 Executive Order on the Scientific and Technological Development Strategy of the Russian Federation No 642 of 1 December 2016. 4 The term was introduced by the STD Strategy. It is applied to technologies that are important for developing different areas of economic activity (for example, digital and quantum technologies). 5 Annual Presidential Address to the Federal Assembly, 1 December 2016. See http://kremlin.ru/events/ president/news/53379 424 Section 6 Institutional Changes The STD Strategy sets out two important parameters that should determine the provision of funding to the research and development (R&D) sector: it is expected that, by the year 2035, its amount will make up 2% of GDP, and the share of private investment therein should be not less than that of public investment 1. Such expectations with regard to spending allocated to science are very moderate – both in quantitative terms and from the point of view of the private sector's share, because even at present, the average amount of expenditures on science in the developed countries is generally above 2% of GDP, while the share of private investment is usually higher than that of government investment. This is the most pessimistic target set by the STD Strategy, because it is indeed difficult to achieve any serious success with a low level of funding. The STD Strategy contains
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